TRP Health Policy Report
November 24, 2014
Last week saw the Keystone XL oil pipeline and President Obama’s executive action on immigration take center stage in Washington. The Senate on Tuesday narrowly defeated legislation (S. 2280) that would have approved the Keystone XL pipeline, delivering a political setback to Sen. Mary Landrieu (D-LA) in her Dec. 6 runoff race against challenger Rep. Bill Cassidy (R-LA). The vote was 59-41, falling just shy of the 60 needed to pass the legislation. Also on Tuesday, the Senate rejected a measure (S. 2685) to reform the National Security Agency's surveillance program in a 58-42 vote, with 60 votes needed to advance. Senators also approved a series of judicial and executive branch nominations. With Republicans taking control of the upper chamber in January, Democrats are looking to clear as many of President Obama’s nominations as possible before the end of the year.
Across the Capitol, House Democrats held their leadership elections last Tuesday. All of the top leaders — House Minority Leader Nancy Pelosi (D-CA), House Minority Whip Steny Hoyer (D-MD) and Assistant Minority Leader James Clyburn (D-SC) — won reelection easily. Floor action in the House centered on a trio of GOP-backed bills to limit EPA rulemaking. Last Thursday, members voted 238-172 to pass legislation (H.R. 4795) to enhance the EPA reporting requirements under the Clean Air Act. On Wednesday, the House voted 237-190 (H.R. 4012) to prevent the EPA from issuing new regulations unless it provides scientific justification. On Tuesday, the House voted 229-191 (H.R. 1422) to reform the EPA's Scientific Advisory Board. Lawmakers left town last Thursday night until after the Thanksgiving holiday, leaving only two weeks to pass a spending measure to keep the government funded past Dec. 11.
In notable healthcare developments, House Speaker John Boehner (R-OH) filed a long-awaited lawsuit on Friday that alleges President Obama took unlawful steps to delay part the Affordable Care Act (ACA) and is paying out funds to insurers without Congressional approval. The action came amid fierce GOP criticism of the President’s announcement last Wednesday that millions of illegal immigrants will not face deportation. On Thursday, the White House said it erroneously calculated the number of people with health coverage under the health law, incorrectly adding 380,000 dental subscribers to raise the total above 7 million. HHS officials said the accurate number is 6.7 million as of Oct. 15, saying the U.S. won’t include dental plans in future reports. The error was discovered by Republican investigators for the House Oversight and Government Reform Committee, using data they obtained from insurers. Elsewhere, the CBO said legislation (H.R. 4015/S. 2000) to repeal and replace the Medicare physician payment system would cost $144 billion from 2015 to 2024, up from its previous $138 billion 10-year estimate.
The Week Ahead
Both the House and Senate are adjourned until December 1. When lawmakers return, the defense authorization and must-pass appropriations legislation will top the Congressional agenda. Unlike previous lame-duck sessions that saw compromises reached on major legislative items, it is possible that extending the continuing resolution (CR) could be the only notable accomplishment ahead of the 114th Congress. Rumors about potential deals continue on issues including tax extenders, Ebola, and Syria, but there’s no certainty as to how Senate Republicans will choose to cooperate on these measures with a pending majority in 2015. And with the government funding bill expiring in early December, lawmakers will have little time to negotiate how federal funds should be spent for the rest of the fiscal year.
HHS Admits Error in ACA Enrollment Numbers, Revises Figure to 6.7M
Last Thursday, HHS said it made a mistake in how it calculated enrollments under the Affordable Care Act, incorrectly adding 380,000 dental subscribers to surpass the threshold of 7 million for 2014. That number had been adopted by the government as a goal before sign-ups began in October 2013. The House Oversight and Government Reform Committee identified the inclusion of dental plans after examining enrollment records supplied to the government by insurers. HHS Secretary Sylvia Mathews Burwell apologized for the error last Thursday, saying her agency was investigating how the discrepancy happened and that it would report the numbers separately in the future. The Administration previously had made a similar mistake. In September, CMS Administrator Marilyn Tavenner told a Congressional hearing that 7.3 million people had paid for coverage as of mid-August. That figure also inaccurately included dental plans, Administration officials confirmed on Thursday.
Republican lawmakers quickly criticized the new announcement. Rep. Darrell Issa (R-CA), the chairman of the House Oversight panel, said that adding the dental plans “obscured and downplayed the number of dropouts.” He added that, “HHS must provide a clear and detailed account of who knew about this decision and when they knew it.” Even without the inflated numbers from dental plans, the exchanges have lost more than 1 million subscribers since May, a decline CMS attributes to people picking up employer coverage, becoming eligible for Medicaid or simply not paying their premiums. The timing of the correction was particularly bad for the White House. Federal officials had been able to point to a relatively smooth launch of the exchanges for their second round of sign-ups under the law, with few of the technical problems that marked their opening last year.
No ACA Benefits in President's Immigration Order
Last Thursday, President Obama announced a plan that would allow up to five million undocumented immigrants who have resided in the U.S. for at least five years to apply for a program to avoid deportation, but the plan will not allow them to qualify for health benefits under the ACA. Immigrants covered by the President’s executive actions are also unlikely to receive public benefits like food stamps, Medicaid coverage or other need-based federal programs offered to citizens and some legal residents. The ACA restriction may be the most immediate concern for many immigrants and for activists who have urged the President to act to prevent deportations.
But it reflects the political sensitivities surrounding two of the most contentious issues in Washington – healthcare and immigration.
The question of whether illegal immigrants should have access to healthcare benefits has long been a central part of the immigration reform debate. Immigration legislation passed in the Senate in 2013 would have denied undocumented immigrants access to federal health benefits, including the ACA, for as long as 13 years. But in that bill, immigrants could eventually qualify for full legal status and for federal benefits. Last week, HHS Secretary Sylvia Mathews Burwell confirmed that immigrants who were covered by the President’s 2012 executive actions could not receive subsidies from the Healthcare.gov marketplace. However, she said that federal aid, including healthcare benefits, could be available to children who are U.S. citizens but living with parents who are illegal immigrants. The President’s plan faces strong opposition from Republicans, who said it will scuttle bipartisan compromises on other priorities. But the White House said the executive actions fall within his legal authority. Republicans will use this week’s Congressional recess to determine whether they can unite around a strategy to overturn the President’s executive actions.
House GOP Files Lawsuit over Health Law
Last Friday, House Republicans filed a lawsuit against the Obama Administration alleging that the way in which the White House implemented the health law violates the Constitution. Filed in federal court in Washington, D.C., the lawsuit escalates a brewing battle between GOP lawmakers and the White House over separation of powers. One focus of the suit is an authorization that the government reimburse insurers for discounts they are required to offer low-income enrollees. The House lawsuit alleges that while the program may have been authorized by the law, Congress never appropriated money to pay for it.
The complaint also claims the Administration acted illegally when it twice delayed enforcement of the requirement that large employers offer coverage to workers or pay a penalty. Republicans have long criticized the delays, the first of which came in July 2013 and put off penalties until 2015. The requirement was revised again earlier this year, putting off compliance for employers with 50 to 99 full-time workers until 2016. The White House didn’t respond to the specific allegations made in the complaint but attacked the lawsuit as a frivolous distraction. Legal analysts said the lawsuit faces several hurdles, including whether the House has the legal right, or standing, to sue the Administration.
Generic Drug Prices Draw Senate Scrutiny
Last Thursday, a Senate panel convened to scrutinize the cost of generic drugs, which typically cost 30 to 80 percent less than their branded counterparts. Sen. Bernie Sanders (I-VT), who chairs the Senate Subcommittee on Primary Health and Aging said his panel aimed to review recent, generic price increases, a trend he said will limit patient access to “the medicine they need.” Experts testified that there are multiple, often unrelated, forces behind the price increases, including drug ingredient shortages, industry consolidation and production slowdowns due to manufacturing problems. But the lawmakers convening Thursday's session said the federal government needs to play a bigger role in restraining prices. The hearing coincided with the introduction of a bill by Sanders and Rep. Rep. Elijah Cummings (D-MD), ranking member of the House Oversight Committee, which would require generic drugmakers to pay rebates to Medicare and Medicaid when prices of their medications outpace inflation. Those payments are already mandatory for branded drugs, but have never applied to generics.
On October 2, Sanders and Cummings sent letters to the makers of 10 generic drugs that have seen price increases of over 300 percent or more in recent months. The Generic Pharmaceutical Association said in a statement Thursday that the 10 drugs cited by lawmakers do not reflect the broader U.S. market, which includes 12,000 generic medications that have reduced drug costs by billions. But pharmaceutical experts testifying Thursday said the price spikes reflect broader price increases for generics, which have traditionally fallen over time. Academic experts recommended several new government policies, including allowing the FDA to accelerate the clearance of generic drugs for which there are few manufacturers. In light of the looming shift of power in the Senate, policy experts don’t foresee meaningful legislative action on generic drug pricing in the near future.
Study: Premiums for Most Popular Exchange Plans to Rise 10% in 2015
According to an analysis released last week by Avalere Health, premiums for the most popular coverage in the Affordable Care Act's federal exchange in 2014 will increase by 10% on average in 2015. For the analysis, researchers examined data released last week by HHS to determine each region's monthly premium for the lowest-cost Silver Plan. The consulting firm emphasized that marketplace enrollees could see their monthly costs rise for several reasons. Not only are premiums increasing, but if consumers do not pick a different plan, they could pay more due to annual changes in how subsidies are calculated.
The report highlights the complex nature of out-of-pocket costs for ACA plans for individuals receiving subsidies. The credits are calculated annually based on the price of the second-lowest-cost Silver Plan in each region, or the “benchmark” plan, which varies year to year. People who find that their plan is suddenly more expensive than the benchmark policy have to pay the difference dollar for dollar. Only a handful of regions will see their benchmark plans remain the same for 2015, meaning that many people who receive subsidies will face higher prices if they do not pick another plan. Insurers can automatically re-enroll consumers who do not choose a different plan, and federal subsidies remain the same for that group.
In notable healthcare developments, House Speaker John Boehner (R-OH) filed a long-awaited lawsuit on Friday that alleges President Obama took unlawful steps to delay part the Affordable Care Act (ACA) and is paying out funds to insurers without Congressional approval. The action came amid fierce GOP criticism of the President’s announcement last Wednesday that millions of illegal immigrants will not face deportation. On Thursday, the White House said it erroneously calculated the number of people with health coverage under the health law, incorrectly adding 380,000 dental subscribers to raise the total above 7 million. HHS officials said the accurate number is 6.7 million as of Oct. 15, saying the U.S. won’t include dental plans in future reports. The error was discovered by Republican investigators for the House Oversight and Government Reform Committee, using data they obtained from insurers. Elsewhere, the CBO said legislation (H.R. 4015/S. 2000) to repeal and replace the Medicare physician payment system would cost $144 billion from 2015 to 2024, up from its previous $138 billion 10-year estimate.
The Week Ahead
Both the House and Senate are adjourned until December 1. When lawmakers return, the defense authorization and must-pass appropriations legislation will top the Congressional agenda. Unlike previous lame-duck sessions that saw compromises reached on major legislative items, it is possible that extending the continuing resolution (CR) could be the only notable accomplishment ahead of the 114th Congress. Rumors about potential deals continue on issues including tax extenders, Ebola, and Syria, but there’s no certainty as to how Senate Republicans will choose to cooperate on these measures with a pending majority in 2015. And with the government funding bill expiring in early December, lawmakers will have little time to negotiate how federal funds should be spent for the rest of the fiscal year.
HHS Admits Error in ACA Enrollment Numbers, Revises Figure to 6.7M
Last Thursday, HHS said it made a mistake in how it calculated enrollments under the Affordable Care Act, incorrectly adding 380,000 dental subscribers to surpass the threshold of 7 million for 2014. That number had been adopted by the government as a goal before sign-ups began in October 2013. The House Oversight and Government Reform Committee identified the inclusion of dental plans after examining enrollment records supplied to the government by insurers. HHS Secretary Sylvia Mathews Burwell apologized for the error last Thursday, saying her agency was investigating how the discrepancy happened and that it would report the numbers separately in the future. The Administration previously had made a similar mistake. In September, CMS Administrator Marilyn Tavenner told a Congressional hearing that 7.3 million people had paid for coverage as of mid-August. That figure also inaccurately included dental plans, Administration officials confirmed on Thursday.
Republican lawmakers quickly criticized the new announcement. Rep. Darrell Issa (R-CA), the chairman of the House Oversight panel, said that adding the dental plans “obscured and downplayed the number of dropouts.” He added that, “HHS must provide a clear and detailed account of who knew about this decision and when they knew it.” Even without the inflated numbers from dental plans, the exchanges have lost more than 1 million subscribers since May, a decline CMS attributes to people picking up employer coverage, becoming eligible for Medicaid or simply not paying their premiums. The timing of the correction was particularly bad for the White House. Federal officials had been able to point to a relatively smooth launch of the exchanges for their second round of sign-ups under the law, with few of the technical problems that marked their opening last year.
No ACA Benefits in President's Immigration Order
Last Thursday, President Obama announced a plan that would allow up to five million undocumented immigrants who have resided in the U.S. for at least five years to apply for a program to avoid deportation, but the plan will not allow them to qualify for health benefits under the ACA. Immigrants covered by the President’s executive actions are also unlikely to receive public benefits like food stamps, Medicaid coverage or other need-based federal programs offered to citizens and some legal residents. The ACA restriction may be the most immediate concern for many immigrants and for activists who have urged the President to act to prevent deportations.
But it reflects the political sensitivities surrounding two of the most contentious issues in Washington – healthcare and immigration.
The question of whether illegal immigrants should have access to healthcare benefits has long been a central part of the immigration reform debate. Immigration legislation passed in the Senate in 2013 would have denied undocumented immigrants access to federal health benefits, including the ACA, for as long as 13 years. But in that bill, immigrants could eventually qualify for full legal status and for federal benefits. Last week, HHS Secretary Sylvia Mathews Burwell confirmed that immigrants who were covered by the President’s 2012 executive actions could not receive subsidies from the Healthcare.gov marketplace. However, she said that federal aid, including healthcare benefits, could be available to children who are U.S. citizens but living with parents who are illegal immigrants. The President’s plan faces strong opposition from Republicans, who said it will scuttle bipartisan compromises on other priorities. But the White House said the executive actions fall within his legal authority. Republicans will use this week’s Congressional recess to determine whether they can unite around a strategy to overturn the President’s executive actions.
House GOP Files Lawsuit over Health Law
Last Friday, House Republicans filed a lawsuit against the Obama Administration alleging that the way in which the White House implemented the health law violates the Constitution. Filed in federal court in Washington, D.C., the lawsuit escalates a brewing battle between GOP lawmakers and the White House over separation of powers. One focus of the suit is an authorization that the government reimburse insurers for discounts they are required to offer low-income enrollees. The House lawsuit alleges that while the program may have been authorized by the law, Congress never appropriated money to pay for it.
The complaint also claims the Administration acted illegally when it twice delayed enforcement of the requirement that large employers offer coverage to workers or pay a penalty. Republicans have long criticized the delays, the first of which came in July 2013 and put off penalties until 2015. The requirement was revised again earlier this year, putting off compliance for employers with 50 to 99 full-time workers until 2016. The White House didn’t respond to the specific allegations made in the complaint but attacked the lawsuit as a frivolous distraction. Legal analysts said the lawsuit faces several hurdles, including whether the House has the legal right, or standing, to sue the Administration.
Generic Drug Prices Draw Senate Scrutiny
Last Thursday, a Senate panel convened to scrutinize the cost of generic drugs, which typically cost 30 to 80 percent less than their branded counterparts. Sen. Bernie Sanders (I-VT), who chairs the Senate Subcommittee on Primary Health and Aging said his panel aimed to review recent, generic price increases, a trend he said will limit patient access to “the medicine they need.” Experts testified that there are multiple, often unrelated, forces behind the price increases, including drug ingredient shortages, industry consolidation and production slowdowns due to manufacturing problems. But the lawmakers convening Thursday's session said the federal government needs to play a bigger role in restraining prices. The hearing coincided with the introduction of a bill by Sanders and Rep. Rep. Elijah Cummings (D-MD), ranking member of the House Oversight Committee, which would require generic drugmakers to pay rebates to Medicare and Medicaid when prices of their medications outpace inflation. Those payments are already mandatory for branded drugs, but have never applied to generics.
On October 2, Sanders and Cummings sent letters to the makers of 10 generic drugs that have seen price increases of over 300 percent or more in recent months. The Generic Pharmaceutical Association said in a statement Thursday that the 10 drugs cited by lawmakers do not reflect the broader U.S. market, which includes 12,000 generic medications that have reduced drug costs by billions. But pharmaceutical experts testifying Thursday said the price spikes reflect broader price increases for generics, which have traditionally fallen over time. Academic experts recommended several new government policies, including allowing the FDA to accelerate the clearance of generic drugs for which there are few manufacturers. In light of the looming shift of power in the Senate, policy experts don’t foresee meaningful legislative action on generic drug pricing in the near future.
Study: Premiums for Most Popular Exchange Plans to Rise 10% in 2015
According to an analysis released last week by Avalere Health, premiums for the most popular coverage in the Affordable Care Act's federal exchange in 2014 will increase by 10% on average in 2015. For the analysis, researchers examined data released last week by HHS to determine each region's monthly premium for the lowest-cost Silver Plan. The consulting firm emphasized that marketplace enrollees could see their monthly costs rise for several reasons. Not only are premiums increasing, but if consumers do not pick a different plan, they could pay more due to annual changes in how subsidies are calculated.
The report highlights the complex nature of out-of-pocket costs for ACA plans for individuals receiving subsidies. The credits are calculated annually based on the price of the second-lowest-cost Silver Plan in each region, or the “benchmark” plan, which varies year to year. People who find that their plan is suddenly more expensive than the benchmark policy have to pay the difference dollar for dollar. Only a handful of regions will see their benchmark plans remain the same for 2015, meaning that many people who receive subsidies will face higher prices if they do not pick another plan. Insurers can automatically re-enroll consumers who do not choose a different plan, and federal subsidies remain the same for that group.